A Different Kind of Valley for Tech Start-ups

Christina DesMarais is an Inc.com contributor who writes about the tech startup community, covering innovative ideas, news, and trends. On Google+, add her to one of your circles. Have a tip? Email her at christinadesmarais (at) live (dot) com.

Ask Jerry Nettuno why he didn’t found his startup Schedulicity in Silicon Valley and he’ll tell you he didn’t see the point. For one thing, he really likes where he lives.

With a population of only 38,000, Bozeman, Montana, is barely a blip on the map compared with some of the other places cranking out tech start-ups. But Nettuno says the area attracts bright minds—increasingly more of them from the San Francisco Bay area itself.

“It’s a small town in southwestern Montana right in the mountains with fantastic schools and unbelievable opportunities for recreation, so we have people that come here from all over,” he says of his 19-person team. “People come to [Bozeman] generally to look for a better, simpler way of life.”

Nettuno launched Schedulicity, an online appointment booking platform, to the public in 2010. He wouldn’t reveal the company’s revenue figures but says the platform now facilitates $500 million worth of business each year. It helps small businesses, such as hair salons or massage therapists, fill up their appointment books on the Web and slot last-minute cancellations by marketing “pop-up offers” to customers. The company makes money by charging businesses $19 a month for a single user account or $39 for a multiple-user plan.

Schedulicity isn’t the only tech company to prefer the quiet life. Bozeman is home to social media e-learning platform Wisetail, CRM software provider RightNow Technologies (which Oracle just acquired for $1.5 billion), and TechRanch, an advisory organization that has helped more than 60 tech start-ups get off the ground in the area.

“People [in Bozeman] aren’t agitated and they aren’t in a hurry all the time,” says Nettuno. “So finding support people that are happy and enjoy talking to customers is really easy.”

All that said, he admits there are benefits to inclusion in the Silicon Valley club and recently hired one of its own, Diana Vincent-Galvan, to work from the Bay Area as VP of Communications and raise its profile within the tech community. So far, it’s working: She helped the company land a DEMOgod Award at DEMO Fall 2011 for those pop-up offers.

But when I asked her to talk about the culture of Silicon Valley—since she has spent her career working there for the likes of Yahoo and Cisco—she raved about the Gallatin Valley instead, even going as far as calling her first trip to Bozeman a “Twilight Zone experience.” “Everyone, and not just the people at the company, but everyone at the restaurants, the stores, and the hotels have a completely different attitude. Everybody was so nice and so catering and so willing to help.”

On the investor front, Bozeman boasts a network of angels who hail from all over the country, but the area still has some catching up to do. "Bozeman isn't home to any institutional firms, which is very different from the Silicon Valley where you can find several within a three-block radius," says Nettuno, referring to Sand Hill Road. So for Series A funding, which the company aims to close in the next 60 days, he pitched angels in Bozeman, but he also went west to pitch institutional investors.

Still, he says he's been hearing some feedback that should bode well for other so-called "Silicon Prairie" start-ups: "There are VC firms that prefer to invest in companies outside of the Valley because, according to them, they seem to be better connected to their product and more committed to their customers."

And that much—building a product with a solid business model—Nettuno says his company has gotten right. "I think we could have done that anywhere,” he says. “But we’re lucky enough to be in a place where we love to live. We love everything that comes with living here in Montana, except maybe minus 25 degrees in January,” he says.

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